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Too many founders have learned the hard way that weak people practices can put their employees at risk, expose their business to costly legal threats, and indelibly tarnish their reputations.
Today’s workers seek value-driven companies and bring with them a deeper understanding of their rights. If your HR department doesn’t screen applicants against culture or speak openly with you about the impact of important hires, your ability to lead your company to future success will be compromised.
Worse, if your HR manager is not trained to act impartially or has the authority to intervene quickly, it can create systemic problems that prevent victims from seeking justice. This forces victims to seek other remedies that surface daily in viral callouts and high-profile court cases.
Barring unflattering headlines, many startups are seeing their financial value decimated while they’re just getting started. If it’s not about legal fees and processing costs, then it’s about lost customers and potential partners through negative coverage. Even if a lawsuit exonerates your company, the mere accusation can come at a cost, and extended litigation can uncover sensitive internal company dealings.
Related: This entrepreneur has solutions to HR problems you didn’t know you had
To prevent this from happening, you need to focus on building a respected and experienced HR team that is empowered to deal with allegations of misconduct from the start, even if it’s someone from your leadership team. It’s up to you to create a culture that supports reporting, investigating, and punishing misconduct in the workplace—whether it’s harassment or discrimination, bullying, or any other illegal activity.
When setting up your HR department, these three steps will help you to prevent misconduct from occurring in the first place – or, if it does, to take quick and consistent action against it.
1: Hire experienced HR leaders who share your company’s values
It can be difficult for HR staff to discern which aspects of a complaint are true and which are not. Add in a power imbalance, such as occurs between a manager and a subordinate, and HR may find themselves not just between two employees, but also between higher-level employees who just want to sort out the problem. If you haven’t hired HR professionals with the experience to conduct the necessary conversations and evenly enforce the rules, you could be held liable for any wrongdoing that follows.
As a founder, you must prioritize hiring HR leaders who are strong and principled leaders. When interviewing potential candidates, ask them how they would handle serious allegations and what processes they would use to ensure fair outcomes for all parties. Based on their answers, you want to make sure they see your company’s values ​​as equals. You may also want to seek out experienced hiring managers who have dealt with harsh allegations from employees before.
After you hire the right talent, you need to make it clear that they have the authority and responsibility to treat all allegations of misconduct equally, regardless of who is accused—even if it’s someone on your leadership team.
See also: How companies keep women safe in the workplace
2. Create protocols that protect the victims and your business, not the suspects
A national center for women’s rights learn found that up to 70% of those who report harassment face some form of retaliation. And 37% said nothing happened to the harasser after the complaint. But even if the company is engaged, many will still outsource the process to outside investigators and attorneys. Again, this fits into a predictable pattern and usually ends with a benevolent acknowledgment of the complaint, followed by language indicating that the company has taken all steps required by law to resolve the complaint. What that really means is that they have taken as little action as possible to avoid liability.
Unfortunately for these companies, there are many experienced lawyers watching and waiting. They know that investigative reports are likely to contain harmful information and will use the discovery process to gain leverage for their client. This can be prevented if the company takes appropriate measures from the start.
This first requires a fair and neutral investigation. This does not require hiring an outside company. A victim’s claims can often be verified by interviewing key personnel and reviewing written communications and other records.
Second, if the allegations are deemed true and serious, take quick action to hold the perpetrator accountable. In many cases, this means termination of employment.
To ensure that your process of investigating and adjudicating a case is respected by all parties, it should be based on protocols that treat all allegations equally. This ensures that everyone involved – from the HR team to the executives, the accuser to the accused – have the same rights and obligations.
3: Empower HR to let go of toxic employees, even if they are high performers
Proper handling of an allegation is rarely an issue when a low-level employee commits a crime. If misconduct occurs on the part of an hourly worker, appropriate measures can often be expected from the company. But when it comes to a valued leader, decisions can be weighed against the perceived value the employee brings to the organization. This reflects a misunderstanding of the true cost of these people.
An abusive person in a managerial position can cost more than many realize through high employee turnover and productivity issues. Half of the employees who leave their jobs do so, at least in part, because of bad managers, and replacing employees costs a company up to 50% of the person’s salary. In terms of productivity, a study found that teams with toxic managers generated 27% less revenue per employee than well-managed teams.
A similar effect can be measured for stock corporations. When a senior official of a public company is subpoenaed for misconduct, the Hit the company’s stock price can result in a rapid loss of millions or even billions of dollars in market capitalization.
Protecting these abusive employees isn’t just wrong. It’s costly and potentially fatal to your business. For this reason, it’s important to make it clear to your Human Resources department that they have the authority to terminate the employment of any employee based on the findings of a fair investigation, even if they are high-ranking or high-performing employees.
You may think none of this applies to you or that allegations never happen at your company, but the numbers tell a different story. 60% of US workers have experienced or witnessed discrimination in the workplace and unfortunately 40% reported retaliation after speaking up.
In each of these cases, the company has exposed itself to possible liability. Law firms are increasingly looking for ways to advocate for these victims. You can protect your business and your employees by doing just that – protecting themnot the accused.
